I came across a story in Your Houston News this week that discusses the Medicaid Estate Recovery Program and exactly what it does. It occurred to me that many people are probably totally unaware of this program’s existence until, like the author of the letter, it hits home. The program is quite interesting and very worthy of mention, however, especially if there is a possibility it could directly affect you in the future.
Costs of Services
The Medicaid Estate Recovery Program is a branch of the state’s Medicaid system that essentially enforces payment of the bills tabulated for health care services. For many who face a situation with this program, it is often in the case of long term care.
For those who are on Medicare but unable to pay out of pocket for long term care services like those received in a nursing home, assisted living facility, or at home, Medicaid is often the answer. In order to qualify for Medicaid, you must meet a certain financial eligibility requirement that proves you do not have a substantial amount of assets that you could use to pay for care.
Once receiving Medicaid services, many people believe that is the end of the financial part. In truth, it is often far from the beginning.
As the individual writing into the newspaper recently found out, once the services have been completed, many people are often in for a surprise. One woman received a bill of $43,000 for her mother’s care more than a year after her mother had died. She had received care at home that they believed was covered by Medicaid. It turns out, because she still owned a house, Medicaid was running a tab.
Too many people are unaware of this fact until they receive the “Notice of Intent to File Claim” for a lien against the house or other estate assets after the care recipient has died. Medicaid is able to recover assets to pay for not just long term care, but all health care costs like medication, hospital charges, and other deductibles and co-payments.
This type of sudden notice can be financially devastating, especially if you are relying upon that estate for your livelihood. If you have other assets on the side in which you can pay the bill, Medicaid will not force you to give up the estate. If you don’t, though, there is a good chance you may lose the house and any other part of the estate needed to cover the full amount.
If you aren’t aware of this program ahead of time, it can be easy to get caught in the middle of it later down the road. Planning in advance and researching all of your options can help you avoid this type of financial disaster, though. Long term care is often the biggest health expense in retirement, averaging $50,000 annually, and most people haven’t considered how they will pay for that care.
Because Medicare won’t cover the cost and Medicaid only will if you have essentially zero assets, it makes sense to arrange your own plan for payment when you are still young, healthy, and financially able. Long term care insurance provides an opportunity to help shield your estate from the high cost of care and transfers the financial risk to the insurance company.
Read more about the Medicaid Estate Recovery Program and how it works. You can also find out more about long term care insurance, the best time to buy, and the right amount of coverage for you. Fill out this form and we will send you a no-cost comparison of the top policies personalized for your specific situation.